Exam 22: Consumer Preferences and Consumer Choice

The assumption that more is preferred to less explains why indifference curves:

If two combinations of two goods yield the same level of satisfaction,then they are on:

Use the following to answer question: -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.The highest attainable level of utility,given budget constraint FL,is at point:

Use the following to answer question: -(Figure: The Optimal Consumption Bundle)Use Figure The Optimal Consumption Bundle.Which of the following could lead to an optimal consumption bundle on indifference curve I₁?

Use the following to answer question: -(Figure: Harold's Indifference Curves)Use Figure Harold's Indifference Curves.If the price of bread is $1 per loaf,the price of cheese is $2 per pound,and Harold has $14 to spend on bread and cheese,Harold's optimal consumption bundle is _____ loaves of bread and _____ pounds of cheese.

Javon is consuming his optimal utility-maximizing consumption bundle of lobster and macaroni-and-cheese dinners.Call this bundle A.His income is $100,the price of a macaroni-and-cheese dinner is $5,and the price of a lobster is $20.Put lobsters on the vertical axis and put macaroni-and-cheese dinners on the horizontal axis.His income increases to $500 and the prices of macaroni-and-cheese dinners and lobster remain constant.With the increase in income,Javon changes his consumption of the two goods and now maximizes utility at bundle B.If macaroni-and-cheese dinners are an inferior good for Javon:

Use the following to answer question: -(Figure: Indifference Curves and Consumption Bundles)Use Figure Indifference Curves and Consumption Bundles.The lines AA and BC are parallel.The optimal consumption point could shift from b to c as a result of any of the following EXCEPT:

Use the following to answer question: -(Figure: Kristin's Budget Line)Use Figure Kristin's Budget Line.The price of a cup of cappuccino is $3,and the price of an apple is $1.Suppose Kristin initially consumes 10 cups of cappuccino and 30 apples.Then,the price of apples increases to $3 each and the price of cappuccino remains unchanged.As a result of the price change,Kristin's optimal consumption bundle changes,reflected by a decrease in the consumption of both apples and cappuccinos.If Kristin is to maintain the same level of utility as before the price change,she must:

Mr.Coiner is always willing to exchange two nickels for a dime,no matter how many nickels and dimes he has.This implies that nickels and dimes are ordinary goods for Mr.Coiner.

Use the following to answer question: -(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.The lowest level of utility shown in the figure is associated with indifference curve:

For most goods,indifference curves:

(Scenario: E-Books and Sports Tickets)Read the scenario E-Books and Sports Tickets.Phillip gets an increase in the amount of his monthly income allotted for e-books and sports tickets.Holding everything else constant,Phillip's budget line has: Scenario: E-Books and Sports Tickets Phillip has an income of $300 per month,which he uses to purchase two goods,e-books and sports tickets.Each e-book costs $10,and each ticket costs $15.

A(n)_____ is a curve that shows all of the consumption bundles that yield the same level of total utility for an individual.

Use the following to answer question: -(Figure: The Consumption of Video Games and E-Books)Use Figure The Consumption of Video Games and E-Books.Which chart shows the effect of a decrease in income when both video games and e-books are normal goods?

At the video store,Lucian narrows his selection to either a $2 videocassette of The Evil Dead or a $4 DVD of Finding Nemo.Lucian finally flips a coin to decide which movie to rent.This must mean that Lucian's marginal rate of substitution of The Evil Dead for Finding Nemo is 0.5.

Paola gets 50 units of utility when she consumes 4 cupcakes and 2 glasses of milk.She also gets 50 units of utility when she consumes 3 cupcakes and 2 glasses of milk.This means that:

An indifference curve shows combinations of two goods that yield:

Two goods in an individual's consumption bundle are perfect substitutes.For a given amount of income,the individual's optimal consumption bundle will contain:

Use the following to answer question: -(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Ashyra consumes at point I.Ashyra could gain more utility by choosing point _____,all other things held equal.

In terms of indifference curves,an increase in total utility is represented by a _____ indifference curve.